Martin Lewis has urged car and home insurance customers to check if they can lock into a cheap deal now ahead of a huge rule change in just two days.
New measures are being brought in on January 1 to end the controversial “loyalty penalty” in a move that will save Brits an estimated £4.2billion over ten years.
The “loyalty penalty” is where long-standing customers find themselves paying more compared to those who regularly switch.
New customers typically get the cheapest deals as insurance firms use lower prices to attract more business.
The insurance shake-up – first announced back in May 2021 – will put an end to this and should, in effect, mean existing policy holders won’t be more than new customers.
But while the rule change is good news for loyal customers, experts have warned not everyone may end up paying less.
MoneySavingExpert founder Martin predicts the change could mean the end of cheap new switcher deals – and is urging insurance customers to check if they can lock into a deal now.
Writing on his MSE website, he said: “My best guess is firms won’t just cut renewal prices to match those for newbies – rates will meet nearer the middle (as happened in 2012, when insurers were barred from gender price discrimination). This will mean savings from switching will likely relatively reduce.
“It was possible insurers would have already made price changes knowing this was coming.
“Yet I’ve heard many waited until December to see what their competitors do – a ‘who jumps first’ strategy – especially as we’re near the year end, a time they really want to acquire new customers (prices already dipped in November).”
He continued: “Unless you’ve done all the checks in recent months, TRY NOW to see if a cheaper switchers’ deal is available before the new rules hit, in case prices rise after, as then if you get the policy you’ll have locked in the price before the new rules hit.”
How to lower your car or home insurance
Even if you’re not near the time to renew your existing policy, you could still end up saving money by comparing prices on your car and home insurance now.
You can normally cancel your current policy – although you may be charged a one-off admin fee for doing this, and whether you’ll get a refund on the remaining months left usually depends on if you’ve made a claim.
Check the wording of your policy carefully to check what you’d be owed back and what it costs to leave.
But if you’ve found a super cheap deal elsewhere, and you’d still be better off by switching with the above taken into account, it could pay you to lock into a better deal now.
Use a comparison site to check prices elsewhere. Make sure you always compare prices on multiple sites, as some insurance firms won’t be covered across all the major comparison websites.
Some of the most popular ones include CompareTheMarket.com, GoCompare.com and Confused.com.
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How to lower the cost of driving
MoneySavingExpert says 23 days before your car insurance is due to expire is the prime time to find the cheapest deals.
For home insurance, you should be checking 21 days before.
If your household has more than one car, you should check if a multicar deal could save you cash.
Legitimately tweaking your job title on your car insurance policy could also lower your costs – as long as the job title you pick can accurately be used to describe your job.
You can’t outright lie about your job title as you could risk being accused of fraud and having your insurance invalidated.
Finally, you should also see if you’d be eligible for cashback on your car or home insurance on sites such as Topcashback and Quidco.
If you’re happy with your current insurance provider, you can still try haggling for a lower price.
Check if there are cheaper deals out there, then call your provider up and ask if they can match it.